A recent study by the Institute for Fiscal Studies (IFS) has revealed a significant increase in health-related welfare claims in the United Kingdom, surpassing trends observed in similar economies. The report, published on September 19, 2024, highlights a 38% rise in the number of working-age individuals receiving health-related benefits in England and Wales over a four-year period.
According to the IFS data, the total number of recipients has reached 3.9 million, representing 10% of the working-age population. This stark increase contrasts sharply with other comparable nations, where figures have either remained stable or decreased. Among the countries analyzed, only Denmark showed a notable increase, albeit at a much lower rate of 13%.
Eduin Latimer, an economist at the IFS and co-author of the report, suggests that the COVID-19 pandemic and the cost-of-living crisis may have had a more severe impact on the UK compared to other nations. These factors, combined with existing strains on the National Health Service (NHS) and relatively low unemployment benefits, could potentially explain the observed trend.
"Figuring out what is behind the recent rise must surely be a top priority for the government if it is going to be able to respond appropriately."
The UK's welfare system provides different levels of support based on an individual's circumstances. For instance, a single unemployed person typically receives £393.45 per month plus housing costs, with potential work-search requirements of up to 35 hours weekly. In contrast, those classified as long-term sick can receive an additional £416 monthly and are exempt from work requirements.
In 2023, the government under former Prime Minister Rishi Sunak introduced a series of incentives and sanctions aimed at reducing inactivity among the working-age population. The current Prime Minister, Keir Starmer, has also expressed a commitment to increasing workforce participation, primarily through improvements to the health service.
The IFS report notes that the increase in health-related welfare spending is concentrated in areas that already had high numbers of claimants before the pandemic. Despite this surge, the UK's expenditure on working-age health-related benefits remains comparable to other similar countries, at approximately 1.7% of national economic output. However, the report warns that this figure could rise if current trends persist.
It's worth noting that the UK's welfare system has undergone significant changes over the years. The introduction of Universal Credit in 2013 aimed to simplify the benefits system, while the country's aging population and increasing life expectancy continue to pose challenges for social services. As of 2021, over 18% of the UK population was aged 65 or older, with life expectancy at birth reaching approximately 81 years in 2023.
As the government grapples with these complex issues, finding effective solutions to address the rising number of health-related welfare claims while promoting workforce participation remains a critical challenge for the UK's economic and social policies.